Thursday, April 25, 2013

The Fapturbo Review: Scam or Not?

When I first got introduced to the Forex market I was instantly intrigued by automated trading programs. The idea of a computer program automatically making trades seemed too good to be true. So hoping this wasn't a scam, I purchased what looked like the most popular program on the market, Fapturbo.

Looking back, I am not sure what really attracted me to Fapturbo. While the thought of “1000%” returns was very appealing, the size of the scroll bar on their website should have been enough to scare me away. (For those of you who haven’t had the pleasure of visiting Fapturbo’s website, I would recommend doing so even just to see the awe-inspiring size of their homepage.)

Even if the layout of the website wasn't enough, I did enjoy the testimonials from  “actual” customers. These collection of traders all swear by the performance, but I am guessing that if the program was able to achieve 99.96% accuracy and 10,607% profit with only 0.32% drawdown, there would be no need for Victor from Germany to give his dubbed-over “review”.

Coming back to my experiences with actually using Fapturbo, I was almost instantly unsatisfied with my purchase. The installation process was confusing and unclear. Even looking at the settings and parameters made me want to give up and crawl back to bed. I then had the brilliant idea to reach out to the customer service hotline, surely they would help. 5 phone calls, 10 emails and 20 days later with no response, I changed my questions about the settings to asking for a full refund.

During this time I let the program run while I tried to figure out the numerous and unexplained settings. The so-called “expert guides” were no help and only included contradicting, equally confusing information. While Fapturbo isn’t necessarily a scam; it does make automated trades in the forex market on MetaTrader 4. However, the program does not make money, the customer service is nonexistent, and they contested my refund until the very end. What more can you expect from the self-proclaimed “ultimated 100% automated Forex Money Machine”? There must be a better way.

Thursday, April 11, 2013

Why You Need An Automated Trading Program Working For You

For most people the advantage of an automated trading program is obvious: people want a computer program that will make them money in their sleep. Thousands of people a year flock towards these programs with dreams of becoming a millionaire and retiring to the French Riviera with their girlfriend, but instead are left disappointed with an empty bank account. These unrealistic expectations, along with a lack of due diligence and research, have given the retail automated trading industry a bad name. However, automated trading programs offer much more than the chance to make a quick dollar.

Building Confidence in A Strategy

One of the biggest problems in designing a new strategy is determining how well it will perform on a live account. Having an automated trading program allows you to backtest and objectively measure your strategy’s performance. The program has clear entry signals, a set risk to reward ratio, and a predetermined trade size, which can all be optimized to fit your trading style and goals. Knowing your strategy was profitable in your backtest gives you the confidence to run your strategy on a live account.

Developing Discipline

Keeping your emotions in check and sticking to a strategy is one of the most difficult and important aspects of becoming a successful trader. The market is indifferent to your feelings. Trading when you’re scared, angry or just after your girlfriend has left you is a great way to lose money. Automated trading programs take the emotions out of trading, and by definition, must follow the rules of your strategy. Allowing an automated strategy to run, without your interference, will force you to become a disciplined trader. This discipline is essential to long-term success as a trader.

Optimizing Your Strategy

Automated trading programs give you the ability to adjust each variable of your strategy to achieve your trading goals. This could mean changing the stop loss or take profit, applying filters for certain market conditions, or even altering your entry and exit signals. In manual trading this could be an arduous and risky process filled with assumptions and guesswork. Automated trading, on the other hand, gives you the ability to conduct backtests quickly and easily with clear, objective results. Optimizing can easily turn an unprofitable strategy into a profitable one.
Automated trading programs won’t make you a millionaire overnight nor are they a get-rich-quick scam. However, using the right program that fits your trading style will help you build confidence, optimize your strategy, and teach you the required discipline to be a successful trader. The right program is also not a bad way to make money while you’re out looking for that new girlfriend.

Wednesday, April 3, 2013

5 Things You Need to Know Before Running Your Expert Advisor

MetaTrader 4 has become the most popular trading platform when it comes to forex automated trading strategies, known as expert advisors. The ability to quickly and easily build expert advisors, or EAs, attracts new traders and experienced coders alike. Within a couple hours, and with a little help from a good tutorial and a fewother examples , you can code your strategy into a working EA, run a backtest, and view the results. While MetaTrader 4 is a great way to get started, when you are building an EA for a live trading account there are some serious issues you need to be aware of.

1. Reliability of Backtesting Results

Great backtesting results can may give you the impression that your system is ready to go live, but it is not quite that easy. These results are completely dependent on the quality of the data used in the backtest, meaning poor data can easily lead to unreliable results. The default data in MetaTrader 4, supplied from MetaQuotes, can only achieve a modeling quality up to 90%. This may seem good enough, but this can cause huge differences in backtesting and live testing results, especially on smaller time frames . Luckily there are sources of free historical data and instructions on how to prepare the data for MetaTrader 4. Obtaining high-quality, reliable data for your backtests should be the first step in preparing an EA to trade a live account.

2. Accurately Reflecting the Spread in Backtests

Once you have reliable data loaded into MetaTrader4, the next important consideration is how to incorporate trading costs, or the spread, into your backtests. The spread can easily turn a profitable EA into a disaster. MetaTrader 4, by default, applies the current spread at the time of the backtest to all the simulated trades. However, spreads vary greatly and depend on your broker. A fixed spread is simply not realistic and backtesting on weekends, when the markets are closed, can lead to some interesting results. (You can view the spread used in the backtest by selecting "Symbol Properties" in the "Strategy Tester" menu.) Currently, there is no quick solution to manually set the spread that I have been able to find but please comment if you have a good workaround.

3. Understanding your Execution Speed

While this mainly is an issue for scalping strategies and at times of high volatility, understanding the execution speed of your trades can be crucial to building a reliable EA. MetaTrader 4 requires trading activity every 30 seconds, known as a "session". If there is no trading activity for more than 30 seconds, your session will automatically time out. This requires the IP address to be automatically be re-authenticated with login and password credentials. This takes time, ranging from 200 ms to up to 2 seconds with some brokers. Even this slight delay in times of high volatility can have a significant impact on the results of your trades. It is possible toload a script that slightly modifies, but does not actually effect your order, every 29 seconds to stop your session from timing out, which cuts out this delay. This is a great way to decrease slippage with any EA.

4. Debugging your EA

If you have spent any time writing a fairly complex EA in MetaTrader 4 you know the hassle of debugging the code. Most other software comes with debugging tools that allow you to easily use a break position to find problems in your code. However, MetaQuotes, the company behind the Metatrader software, caters more to the needs of brokers than traders. This leads to some features, like a debugger, not being included. Fortunately, there are a few ways to simplify your life. One option is to input print() functions into your code (the output of this print function is written to the experts/logs file). Although this can become very cumbersome, especially if you have thousands of lines of code or are not sure where your problem lies. Another option is to follow this guide and download Microsoft’s DebugView to view a neatly formatted log. There is also the option of posting your EA to the mql4 forums and hoping for a good samaritan in the forex community to help you out, but you do have to release the inner workings of your EA.

5. Testing your Metatrader 4 Connection

MT4 must be on and connected to your broker in order for your EA to run. There is nothing more frustrating than thinking you have an EA up and running only to see it has been disconnected and is unable to reconnect. While Metatrader 4 is programmed to automatically reconnect to the server, this does not always work as expected. If you have multiple Metatrader accounts, sometimes the wrong credentials are used during the reconnection process. Or for whatever reason there may be a connection problem with your broker or their server and you are unable to automatically reconnect. The best solution is to delete your unused accounts from the Navigator window in Metatrader 4 or include a IsConnected()command in your code to alert you if you have been disconnected. This may not be a huge problem, but can become very frustrating if you are getting disconnected and your isn't EA continuously up and running.

Metatrader 4 may be the most popular forex automated trading software, but before running your EA on a live account there are some areas that need to be addressed. This is by no means a complete list and I strongly recommend running your EA on a demo account before setting it loose on a live account. However, if you understand these issues and the limitations of MetaTrader 4 then you are well on your way to developing a profitable and fully automated trading strategy. I would love to hear your thoughts on these or other problematic areas of MetaTrader 4. Until then, good luck and happy trading!